Applications for financial services in Europe are abandoned 38 percent of the time, despite the massive investments made by institutions in digital transformation, according to research from Signicat.

“The Battle to Onboard III” report is drawn from a survey of Europeans, and shows that while abandonment rates improved from a year earlier, when more than half (52 percent) of attempts were abandoned, they are similar to 2016 levels (40 percent). Almost a quarter of respondents say the onboarding process is difficult to complete or worse, down from 32 percent last year, but well above the 13 percent response in 2016.

Changes in consumer expectations have run parallel to technology investment by institutions, creating a situation analogous to the “Red Queen Race” of Lewis Carrol’s Through the Looking Glass, in which characters stay in the same place while running very fast.

“New providers of financial services such as neobanks and digital-only payments firms, have changed customer expectations by delivering services in a manner akin to Netflix and Deliveroo,” according to Sarah Kocianski, Head of Research at 11:FS. “Many larger, older financial services firms however are failing to adapt to this new reality. Partly because those expectations change faster than some of these industrial giants can comprehend moving, but also partly because they don’t approach the problem in the same way. Most of them have invested heavily in the technology that underpins these new onboarding processes but failed to rethink the processes themselves. That is why they are falling behind, and that is why customers are still failing to complete applications.”

Onboarding processes are faster in countries with particularly high digital identity adoption rates like Sweden (91 percent) and Norway (81 percent), according to Signicat. In both Sweden (23 percent) and Norway (22 percent), many more applications are completed in under five minutes than in the UK (9 percent). Many more UK onboarding attempts take longer than 30 minutes as well.

Asked who is trusted to create and maintain reusable digital identity schemes, 44 percent said banks, and 25 percent said governments, while only 3 percent said retailers, and 2 percent said social media platforms.

“Institutions have clearly improved their on-boarding processes. But customer expectations have shifted, partly due to challenger banks and fintechs that are laser-focused on perfecting customer experience, but also because consumers are used to better, slicker interfaces elsewhere,” said Gunnar Nordseth, CEO at Signicat.